Upwards Only Rent Reviews: What the 2026 Changes Mean for Commercial Conveyancing
Upwards only rent reviews have long been a standard feature of commercial leases. They protect a landlord’s rental income because the rent can rise at review but cannot fall, even when market rents decline. The English Devolution and Community Empowerment Act 2026 changes that position for many new and renewal commercial leases, making early commercial conveyancing advice important for both landlords and tenants.
In practical terms, affected rent review clauses will generally need to permit rent to move down as well as up. That change could influence rental valuations, lease drafting, investment decisions and commercial conveyancing negotiations across England and Wales.
What is an upwards only rent review in a commercial lease?
An upwards only rent review is a lease provision under which the rent can increase at a review date but cannot decrease. If local market rents have fallen, the tenant continues to pay at least the existing rent. A commercial conveyancing lawyer should review the wording carefully because the calculation method, assumptions, disregards and review procedure can materially affect the outcome.
Imagine a tenant agrees a lease at £50,000 per year.
Five years later, the rent is reviewed on a market rent basis.
If the market has improved and the property is now worth £60,000 per year, the rent increases.
If the market has weakened and the property is now worth £45,000 per year, the rent stays at £50,000 per year.
That is an upward only rent review in action.
What is changing under the English Devolution and Community Empowerment Act 2026?
The English Devolution and Community Empowerment Act 2026 received Royal Assent on 29 April 2026. It includes provisions banning upwards only rent review clauses in new and renewal commercial leases. The relevant measures are expected to come into force through commencement regulations, so landlords and tenants should check the timing and scope of the rules when negotiating documents. The reform is already relevant to commercial conveyancing because lease terms agreed now may govern occupation after the new regime begins.
This means if the reviewed rent is determined by a mechanism such as:
- Open market value;
- RPI or CPI indexation; or
- Turnover-based calculations,
the rent review mechanism will generally need to allow for reviewed rent to increase as well as decrease.
The legislation is also expected to give tenants the ability to initiate rent reviews, even where the lease currently reserves that right solely to the landlord. This could result in rent reviews being undertaken in circumstances where a landlord may previously have elected not to trigger a review, for example where market conditions may support a reduction in rent.
Will the ban affect existing commercial leases?
Generally, existing leases are not expected to be affected, and their upwards only rent review provisions should continue to operate according to their terms. The main impact is expected to fall on new and renewal commercial leases once the relevant provisions are commenced.
The main impact will be on new commercial leases granted after the legislation comes into force.
However, the legislation does contain some unexpected provisions affecting certain renewal or agreement for lease arrangements entered into on or after 17th  March 2026, meaning that transactions being negotiated today may need careful consideration.
Renewals and agreements for lease entered into from 17 March 2026
The legislation contains retrospective provisions affecting certain renewal arrangements entered into on or after 17th  March 2026. As a result, whilst an existing lease may continue to benefit from an upwards only rent review, a future renewal lease granted pursuant to an option or renewal arrangement entered into after that date may not.
For example, a landlord may grant a lease after 17th March 2026 which contains an option for the tenant to renew in the future. The original lease may still contain an upwards only rent review. However, because the option was entered into after 17th  March 2026, the future renewal lease could be caught by the new legislation if the new lease is completed after the legislation comes into force, meaning the rent review for the future lease may operate both upwards and downwards.
Where an option, revisionary lease or agreement for lease is entered into with a new tenant before the legislation comes into force, the resulting lease is generally expected to remain outside the ban, even if the lease itself is completed after the legislation takes effect.
However, this may differ where the arrangement is linked to an existing tenant, a lease renewal, or other arrangements that effectively secure future occupation of premises already occupied by the tenant. In those circumstances, the legislation may apply to the future lease even though the arrangement was entered into before the ban comes into force.
What should landlords and tenants do now?
Landlords, tenants and property investors should identify any proposed lease, renewal option, reversionary lease or agreement for lease that could complete after the new rules take effect. Early commercial conveyancing advice can help ensure the rent review wording reflects the intended commercial position and remains enforceable.
- Review heads of terms and draft rent review clauses before committing to them.
- Check whether a renewal option or agreement for lease falls within the transitional provisions.
- Consider how open-market, index-linked or turnover-based rent calculations would work if rents can decrease.
- Take advice on valuation assumptions, trigger rights, review timetables and dispute procedures.
Detailed commencement regulations and further government guidance are still awaited. Until the implementation position is confirmed, every transaction should be considered on its own facts rather than relying on a standard rent review clause.
Specific legal advice should be obtained when negotiating a commercial lease, renewal option, agreement for lease or other arrangement that may be affected by the new regime.
Frequently asked questions about rent reviews and commercial conveyancing
Are upwards only rent reviews already banned?
The Act is now law, but the rent review provisions depend on commencement regulations. Existing clauses are generally expected to continue, while many new and renewal leases will be affected once the relevant measures come into force.
Can a commercial rent fall after a review?
Under the new regime, affected review mechanisms will generally need to allow the rent to decrease as well as increase. The result will depend on the lease wording and the applicable valuation method.
Why is commercial conveyancing advice important?
Commercial conveyancing advice helps landlords and tenants understand how rent review clauses, renewal rights and transitional rules affect the transaction before they become contractually committed.
Commercial conveyancing support from Hayward Moon
Hayward Moon’s commercial property team advises landlords and tenants on commercial leases, agreements for lease, lease renewals, rent review clauses and related documents. Our conveyancing specialists provide clear, practical guidance to help you understand the risks, negotiate suitable terms and keep your transaction moving.
If you are negotiating a commercial lease or renewal, contact Hayward Moon for tailored commercial conveyancing advice.
